Segment Reporting and Related Disclosures

6 Months Ended

Nov. 30, 2013

Segment Reporting and Related Disclosures

Note 8: Segment Reporting and Related Disclosures

Accounting guidance establishes reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. In order to determine our operating segments, we considered the following: an operating segment is a component of an enterprise (i) that engages in business activities from which it may earn revenues and incur expenses, (ii) whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and (iii) for which discrete financial information is available. In accordance with this guidance, we have identified two operating segments: the rental, lease and sale of T&M equipment and the rental, lease and sale of DP equipment.

Although we have separate operating segments for T&M and DP equipment, these two segments are aggregated into a single reportable segment because they have similar economic characteristics and qualitative factors. The T&M and DP segments have similar long-term average gross margins, and both rent, lease and sell electronic equipment to large corporations, purchase directly from major manufacturers, configure and calibrate the equipment, and ship directly to customers. Additionally, DP segment revenues are less than 10% of total company revenues, and are not considered material.

Our equipment pool, based on acquisition cost, consisted of $432,488 of T&M equipment and $36,832 of DP equipment at November 30, 2013 and $423,306 of T&M equipment and $35,947 of DP equipment at May 31, 2013.

Revenues for these product groups were as follows for the three months ended November 30, 2013 and 2012:

	T&M		DP		Total
2013
Rentals and leases	$	31,060	$	4,145	$	35,205
Sales of equipment and other revenues		22,263		408		22,671
	$	53,323	$	4,553	$	57,876
2012
Rentals and leases	$	30,435	$	4,140	$	34,575
Sales of equipment and other revenues		29,944		673		30,617
	$	60,379	$	4,813	$	65,192

Revenues for these product groups were as follows for the six months ended November 30, 2013 and 2012:

	T&M		DP		Total
2013
Rentals and leases	$	61,880	$	8,982	$	70,862
Sales of equipment and other revenues		46,113		1,069		47,182
	$	107,993	$	10,051	$	118,044
2012
Rentals and leases	$	60,040	$	8,200	$	68,240
Sales of equipment and other revenues		54,091		1,362		55,453
	$	114,131	$	9,562	$	123,693

No single customer accounted for more than 10% of total revenues during the six months ended November 30, 2013 and 2012.

Selected country information is presented below:

	Three Months Ended November 30,				Six Months Ended November 30,
	2013		2012		2013		2012
Revenues: (1)
U.S.	$	48,911	$	56,428	$	99,137	$	105,542
Other (2)		8,965		8,764		18,907		18,151
Total	$	57,876	$	65,192	$	118,044	$	123,693

	As of
	November 30, 2013		May 31, 2013
Net Long-Lived Assets: (3)
U.S.	$	201,365	$	198,956
Other (2)		44,039		49,726
Total	$	245,404	$	248,682

(1) Revenues by country are based on the location of shipping destination, and not whether the order originates in the United States parent or a foreign subsidiary.

(2) Other consists of foreign countries. Each foreign country individually accounts for less than 10% of the total revenues and long-lived assets.

(3) Net long-lived assets include rental and lease equipment and other property, net of accumulated depreciation and amortization.